Microsoft, Facebook & Google are in an all-out battle for your reality

Facebook's acquisition of Oculus Rift might have made headlines for its shock value, but the real story is much bigger.

Last week, Facebook purchased Oculus Rift, the maker of a virtual reality headset, an acquisition which is once again making the brains of the public and tech press hurt. Instagram for $1B? WhatsApp for $19B? Oculus Rift, a company that has barely demoed a product, much less sold anything, for $2B? Crazy right?

Not when you realize that Facebook, Microsoft and Google are in an all-out war for your eyes and brain.

Let's start with the eyes.

Is anyone going to wear this stuff?

The tech-press and public are quick to write off augmented reality and virtual reality as fringe or before their time. When Google launched Glass last year, many correctly noted that, well, the thing looks ridiculous. Only an idiot (or a tech genius who hangs out with billionaires and 'burners') would think you could get millions of people wearing what might best be described as an attempt to make orthodontic head gear "sleek and stylish."

But Sergey Brin, Google's co-founder and internal glass champion, has the tech giant betting on Glass in the long-term. Earlier this month, Google announced that Oakley and Ray-Ban will make the next version of Glass (due out in 2015). It may take the company a few iterations to crack the fashion code, but if Glass looks like Ray-Bans, people will wear them.

What about the Oculus Rift, which looks less like a gaming console and more like a black box squid sucking on users brains through their eyeholes? For the hardcore gamers — the type of person that re-engineers their entire living room around their Xbox One — a pair of weird ski-goggles won't be a problem.

Further, with the full backing of Facebook, the Oculus Rift will quickly become sleeker and more accessible. Let's remember, the current version is basically the same device that only 18 months ago was literally built by a 19-year-old in his garage.

The Rift represents a direct a threat to Microsoft's Xbox business. When compared to Oculus Rift's fully immersive, world creating experience, the Xbox Kinect seems more like something that belongs in an information kiosk at an overpriced museum than a 21st century gaming device.

That's probably why Microsoft quietly bought the IP from a company that makes augmented reality displays for the military for $150 million. Microsoft could either a) develop their own augmented reality/ virtual reality glasses, b) patent troll Google and Facebook like they have Android (MS is slated to make $2 billion in Android royalties this year) or, most likely, both.

But this isn't about just about gaming, it's about a new age of communication and computing.

Why the non-gamers will plug in.

In a call with investors, Zuckerberg came right out and said it.

“After games, we’re going to make Oculus a platform for many other experiences. Imagine enjoying a courtside seat at a game, studying in a classroom of students and teachers all over the world or consulting with a doctor face-to-face — just by putting on goggles in your home,” he says. “This is really a new communication platform. By feeling truly present, you can share unbounded spaces and experiences with the people in your life. Imagine sharing not just moments with your friends online, but entire experiences and adventures.”

If Zuckerberg is correct that virtual and augmented reality represent next-generation communication and computing platforms, Facebook is uniquely situated to take advantage of them. Just two weeks ago, Facebook announced that their facial recognition artificial intelligence is now more accurate than humans. If you had this capability embedded in your glasses, you'd never forget another name.

The way Facebook achieved this breakthrough is telling: Their artificial intelligence algorithm used two-dimensional Facebook pictures to create 3D renderings of the faces in the picture.

Say your Facebook profile included a few dozen photos of yourself (many users have several hundred photos), Facebook could likely create a photorealistic, full-body 3D avatar of you and of all of its users today. So, using existing Facebook and Oculus Rift technology, people could log-in to virtual space as a realistic version of themselves, and interact with equally realistic (and unsettling) versions of their friends. Instead of visiting your friend's timeline, you could see them and, if you wanted to get their attention, actually poke them.

Why is this such an important and strategic fight for these tech giants? Even more valuable than their existing strategy of tracking users movements and monitoring their conversations for ad-targeting, is Facebook, Google, and Microsoft's new strategy. They desperately want to see what you're seeing and then paint your reality with the additional layers of meaning and information only they can provide.

Apps will no longer be about notifications, photo sharing, and text messaging. Apps will be about summoning layers into your filter of reality that change the way you see faces, physical locations, credit and reputation scores, emotional reactions, dietary restrictions and everything around you.

Thats why Facebook will most likely develop their own Google Glass style product to augment reality, and why Google will make Google Glass so good at projecting images on real locations that it will feel like virtual reality. As for Microsoft? All I know is that I don't want to put on virtual reality googles to 'step-inside' an Excel or Powerpoint document….

If all of this sounds creepy, it's because it is and it's happening faster than most people realize. In 2-4 years, screens will seem silly. We'll look at people repeatedly smudging their thumb against a tiny glass screen the same way we do the cats who paw at windows, thinking they can somehow touch whatever's outside.

There's an old quote that's been going around the tech start-up scene in the last few weeks: 'Killers apps' help "get you laid, get you paid, get you made."

In 2012, the short film Sighthighlighted how Artificial Reality technology could be used to distort human relationships, pervert the dating process and ultimately manipulate people. It would have been easy to write off if not for for NYC start-up Infinity AR, which screened a demo video last year for artificial reality glasses that use Facebook data to help guys pick up girls at a bar. By tricking them.

Silver linings?

Interestingly, the diagrams for the artificial reality patents that Microsoft purchased last year show a set of augmented reality glasses connected to a smart watch. The tech world has been waiting almost two years for the much talked about Apple iWatch, but recent rumors indicated that a major focus of the watch will be on unprecedented levels of personal health data. Blood pressure, activity tracking, hydration levels all offer the promise of a new era in democratized and targeted health care.

To me, the idea of connecting this kind of health data with augmented reality glasses that encourage positive behavior change or even increase a user's emotional intelligence are incredibly exciting.

Whether ethical and empowering uses of this technology beat out the programmers trying to pick up girls at a bar will depend on which companies and entrepreneurs win the fight to filter our reality.

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Microsoft, Facebook & Google are in an all-out battle for your reality